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    Symbotic Inc (SYM)

    Q4 2024 Earnings Summary

    Reported on Jan 12, 2025 (After Market Close)
    Pre-Earnings Price$30.56Last close (Nov 18, 2024)
    Post-Earnings Price$38.15Open (Nov 19, 2024)
    Price Change
    $7.59(+24.84%)
    • SYM is expanding into new geographies, including lower-cost regions like Mexico, demonstrating that its system provides significant ROI even in areas with lower labor costs, thereby significantly expanding its total addressable market.
    • SYM achieved a record number of system deployments and completions, with 44 systems in deployment, starting 9 new projects, and completing 4 systems in the quarter, driving strong revenue growth and indicating accelerating business momentum.
    • The acquisition of Veo Robotics adds valuable IP on safety and access to SYM's portfolio, enhancing its robotics technology and potentially differentiating its offerings in the market.
    • Symbotic expects a sequential decline in revenue in Q1 FY2025 compared to Q4 FY2024, despite increased system deployments, indicating potential volatility in revenue and challenges in maintaining growth momentum. The Q1 guidance implies a significant step down in revenue per average system deployed.
    • The company experienced a significant drop in gross margin in operation services, even recording negative margins due to additional resource deployment at certain sites, suggesting potential cost overruns and operational inefficiencies that may persist in the near term. The management acknowledges that they are not at the gross margin level they aim for and that improvements may take time.
    • Symbotic has not reported any new progress on increasing sales penetration in Europe, indicating possible challenges in expanding into new markets, which could limit future growth opportunities.
    1. Q4 Revenue Beat and Q1 Guidance
      Q: What drove Q4 revenue beat and Q1 guidance?
      A: Symbotic's Q4 revenue reached $577 million, exceeding guidance due to significant progress on 44 systems in deployment, including a record 4 completions and 9 new starts. The strong quarter was attributed to correcting previous construction delays faster than planned. For Q1, revenue is guided to grow 40% year-over-year, but sequentially lower due to timing of milestones and not expecting the unusually high number of new starts seen in Q4.

    2. Margins Outlook
      Q: What is pressuring margins, and will they improve?
      A: Gross margin rebounded to 19.6% in Q4, returning to historical levels after being depressed in Q3 due to elongated construction schedules. For Q1, margins are expected to be stable but may face pressure during the transition to higher margins. Symbotic anticipates margins will expand throughout the year by achieving significant milestones, improving schedules, and reducing costs.

    3. Walmex Deal and Backlog Impact
      Q: How does the Walmex deal affect backlog and pricing?
      A: The Walmex agreement adds about $400 million to the backlog in Q1 with two large greenfield sites, larger than previous deployments. Walmex is a new customer, separate from existing Walmart contracts, signaling an opportunity for further expansion in Mexico. The time frame for revenue recognition will differ due to the scale and greenfield nature of the projects.

    4. International Expansion
      Q: Are there updates on European sales and low-cost geographies?
      A: While there are no new developments in Europe, the Walmex deal in Mexico demonstrates viability in lower-cost geographies. Symbotic believes this is not a one-off opportunity and sees potential in markets like South America, where different supply chain dynamics can benefit from their solutions.

    5. GreenBox Facility and CapEx
      Q: How is the GreenBox Georgia facility financed?
      A: The Atlanta GreenBox facility involves both capital expenditures for infrastructure and ongoing R&D investments. There will be CapEx to prepare the over 1 million square foot facility, which is being developed without an anchor customer. Symbotic is actively recruiting customers for this multi-tenant site, expecting it to drive growth and potentially lead to additional facilities.

    6. Customer Growth and Sales Force Expansion
      Q: Will you add 1–2 new customers in FY25 and expand the sales force?
      A: Symbotic continues to aim for 1–2 new customers per year. In FY24, they added Southern Glazers and Walmex, bringing the total to 10 customers. Planning for FY25 includes expanding the sales force to support growth into new verticals and geographies, with the design and size of the team currently in development.

    7. OpEx Increases and EPC Insourcing
      Q: What's driving OpEx increases and EPC insourcing progress?
      A: OpEx increases in Q1 are primarily due to investments in R&D and scaling SG&A as the company grows. The insourcing of EPC (Engineering, Procurement, and Construction) is progressing well, with resources hired for initial sites. EPC costs are included in the cost of goods sold, not OpEx, and bringing it in-house is expected to improve schedules and reduce costs over time.

    8. Veo Robotics Acquisition and Future M&A
      Q: What does the Veo Robotics acquisition bring?
      A: The acquisition of Veo Robotics adds valuable intellectual property in safety and access, enhancing robot speed and safety in mobile robotics applications. The entire Veo team has joined Symbotic, contributing to advancements in technology. Symbotic remains open to future technology acquisitions and continues to receive inbound interest.

    9. Deployment KPIs and Outlook
      Q: How will deployment KPIs evolve in FY25?
      A: The increase from 39 to 44 systems in deployment is the largest to date, driven by a record 9 new project starts and 4 completions in Q4. While starting nine projects every quarter isn't expected, Symbotic anticipates consistent progress with around four completions per quarter and additional starts compared to FY24, depending on readiness and collaboration with customers.

    10. Remote Bot and Vision Technology
      Q: How does remote bot capability improve efficiency?
      A: The integration of vision technology enhances robot reliability by enabling them to detect issues like open lids or leaking bottles. Robots can now see problems, communicate with operators, and learn to handle various situations through machine learning. This advancement allows robots to be operated remotely from anywhere, increasing system reliability and customer confidence in scaling operations.